Market Mantra

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The Nifty which was falling continuously after a rally of 575 points since the last few days have at last found a support around 8400--8370 ranges. Yesterday, it was mentioned to the Premium Group, that if the Nifty is able to hold 8370, we could look for higher targets in the coming days. Nifty as expected bounced back from the oversold levels, today, during the intra-day trade and is now trading at 8,375.60 marginally down by 2.15  points. The Nifty had fallen 248 points last week and till yesterday the bears had an upper-hand, in absence of any fresh policy push from the GOI. In such circumstances the traders are suggested to buy Nifty futures around the support range mentioned above (corresponding to the spot levels), for a short term target of 8424-8454; where the supply is likely to come.

Today's call: Buy the shares of Reliance Capital Ltd at Rs.423.60-424, for a target of Rs.460, in the short term. The scrip seems to have got a support around Rs.420--424 ranges. The passage of the long-pending Insurance Bill — which has increased the cap on foreign direct investment in the insurance sector from 26% to 49%— has come as a shot in the arm for Indian insurance companies. Reliance Capital Ltd, a part of the ADAG, that has interests in insurance (life and general), asset management, consumer loans and broking businesses, stands to gain as it can nowunlock value in its insurance subsidiaries by listing or transferring shares to its foreign partner. The company is among the few listed players that has significant exposure to the insurance businesses. Also, the company’s asset management business offers a good value unlocking opportunity. Japan-based Sumitomo Mitsui Trust Bank recently acquired 2.% in Reliance Capital for Rs.371 crore — valuing the company at Rs.530 per share. The tie-up could help Reliance Capital in its endeavour to set up a bank in India, if permitted by the RBI. Now according to an analysis presented in a pink daily vlued on a sum-of-parts (SOTP) basis, the fair value of Reliance Capital works out to Rs.581 per share. This means there is ample space for appreciation from the CMP of Rs.423.60.
My recommended Gitanjali Gems Ltd today moved to Rs.48.70, intra-day and is  now trading around Rs.47.10. We can look for much higher targets in the coming days. 

India to register highest steel consumption growth: WSA

New Delhi | April 21, 2015: India’s steel consumption growth is likely to be the highest both in current year and the next at 6.2% and 7.3%, respectively, while all other major consuming countries such as China, the US, Japan and Korea are expected to witness a sharp decline, World Steel Association (WSA) says in its first short range outlook for 2015.

The short range outlook, prepared by the largest industry body’s Economic Studies Committee consisting of chief economists of over 40 member companies twice in a year, also forecast continued negative growth in  consumption in China in 2015 and in 2016 due to its government’s re-balancing efforts, which has a huge bearing on the real estate market.

China posted negative steel growth in 2014 for the first time since 1995. The use of steel in China shrunk by 3.3% to 710.8 MT in 2014.

WSA, whose members contribute 85% of the global steel production, sees “increased optimism” about India and forecasts India’s steel use to go up to 80 MT in 2015 and further to 85.8 MT in 2016 from 75.3 MT in 2014, up 2.2% from the previous year.

“In the developing and emerging world, we see increased optimism about India and growth in steel use in some MENA and ASEAN countries.

While these developments will not be enough to counterbalance the deceleration of China, we expect to see gradually improving growth prospects beyond 2016,” said Committee chairman Jurgen Kerkhoff.

The committee sees slower growth in steel demand internationally which is likely to average at 0.5% in the current year, down from 0.6% in 2014, to stand at 1,544 MT. However, the global average will be higher at 1.4% in 2016 to touch at 1,565 MT, it said.

The developed world, which recorded a 6.2% growth in steel demand in 2014 on the back of strong fundamentals and a firming recovery, is going to see a moderate growth in 2015 due to high base effect by 0.2% in 2015 and by 1.8% in 2016.

Meanwhile, overtaking the US, India became the world’s third largest steel producer during January-March of the current year. WSA data showed India produced 22.78 MT steel during the period compared to 19.99 MT by the US.

Courtesy: The Financial Express

What is the criterion of putting the shares of some companies in the T-group for weeks?

I had earlier written many times about the "Brinkmanship" of the BSE and NSE officials when throwing stocks in the  T-group is concerned. Hence, this writing will be no different except, that I have put the same question at the end of this write up. 

You must be aware that the BSE and the NSE have a unique-group called T-group, where the stocks of some companies are kept for "Correction" not for days, but sometimes for months, so that their share price probably come to the level, which has been desired by the stock exchanges. The game is governed by some hidden protocols or no one except the stock exchanges officials or their "Friends"know, when a share of a company will come out of this Jail.

What is more interesting is that a particular stock starts to move up or fall down, much before the stock exchanges actually goes in for a formal declaration of putting in or bringing out of the T-group. Now, the question is who benefits from this exercise: obviously those who have insider information or those traders/investors who are in hand and glove, with some of the officials of the surveillance department. Isn't it? 

Look at the volume of some of the shares traded in the T-group: 

(i) Genera Agri Crop Ltd (Rs.4.62)--6843 shares

(ii) Rasoya Proteins (Face Value: Re.1; CMP:Re.0.56)--12.41 lakh shares

(iii) ABL Biotech (Rs.4.75)--0.25 lakh shares

(iii) Alka Diamond (Rs.19)--2 shares

(iv) AI Champdany (Rs.17)--100 shares

(v)  Alpha Hi-Tech (Re.0.76)--700 sahres

(vi) Birla Capital (Face Value: Rs.2; CMP: Re.0.56)--4500 shares

(vii) BKV Industries (Face Value: Re.1; CMP: Rs.3.09)--346 shares

(viii) Bhagwati Oxygen (Rs.48.60)---260

(ix) Bihar Sponge (Rs.3.02)--0.18 lakh shares

(x) Bhagwandas Metal (Rs.8.95)--200 shares and so on.....

I really do not understand the logic of keeping all these shares in the T-group (and many others whose  name do not figure in the above list), for such a long time. This move punctures the shareholders' wealth and should be treated as an economic offence (strictly speaking). 

Anyway, really, pathetic is the management of the Indian Stock Exchanges and therefore, many of the small and mid caps are still trading near their 52-week lows, even when the Nifty and Sensex is near their all-time high.

Will the stock exchanges clarify on what basis a stock is pushed in the T-group and then taken out....?

Rolta India Ltd: Beginning of Upmove

In February, the defence ministry selected a consortium of Bharat Electronics Ltd (BEL) and IT firm Rolta India as one of the two development agencies for the army’s Battlefield Management System (BMS), a project worth over Rs.50,000 crore. 

That was a big win for the low-profile public sector firm; the big ticket programme to provide a real-time command and control capability to fighting units is part of the defence procurement procedure’s `make’ category and will be one of the largest defence solutions to be manufactured locally.

Revenue from the much-talked-about Rs.50,000 crore battlefield management system (BMS) project, is estimated to materialize from 2017-18 (FY18).

Therefore, this order will be a game changer for the company. Besides, the scrip is one of the cheapest available out there — with FY16 price-earning multiple of mere seven. According to several analyst, with whom I spoke during the last few days, most are of the view that the stock of Rolta India Ltd, can easily cross Rs.200 mark in the coming six months, on the back of this news alone.

Besides, the company earlier announced that it has entered into an agreement with Hitachi India Pvt. Ltd. to address significant market opportunities in high growth business segments in India. The company in a release said that both companies will explore strategic business collaborations for infrastructure systems in large verticals, to offer comprehensive and seamlessly integrated solutions. 

Though the major trigger for this stock is the defense order however, Rolta Power Pvt. Ltd, a unit of Rolta Group has entered into the solar power sector. It has set up a 60 megawatt (MW) production line in Mumbai for solar photovoltaic (PV) modules and the plant has started production from September, 2014. The production line has been set up with an investment of around Rs.100 crore from the company’s internal accruals. Rolta Power expects revenue of about Rs.300 crore over the next 6-9 months from its solar PV operations. The company is testing the waters with the Mumbai unit and will expand capacity to almost 300MW in the next two to three years. The company might also consider getting into solar power production once it achieves that scale. Rolta Group is also banking on the Centre’s plan to increase investment in the clean energy industry. 

As part of this year’s budget, the government announced an investment of Rs.1,000 crore in so-called ultra mega solar power projects across the country. 

Meanwhile, K K Singh, CMD of Rolta India Ltd is confident of maintaining margin growth of around 35-36% backed by good traction seen in most of its products.


For the third quarter ended December 2014, the total income for the company was up 9% at Rs.966.8 Cr versus Rs.885.3 Cr quarter on quarter (Q-o-Q).  EBIDTA was up  6% at Rs.344.8 Cr versus Rs.325.1 Cr Q-o-Q. The EBIDTA margin came in at 35.7% versus 36.7% last quarter but net profit was  up 8% at Rs.76.56 Cr versus Rs.70.8 Cr quarter on quarter.

Axis Bank Ltd: "Instrument of Torture"

The harassment by public/private sector banks and "Gundagardi" (hooliganism) adopted by ICICI Bank to recover bad loans is known to all. But what about Axis Bank Ltd, the bank, which many say is well managed? Bloomberg once reported: 

"Axis Bank Ltd. is Asia’s best-performing bank stock in the past year as it extends loans at twice the pace of Indian rivals wary of the highest stressed assets in more than a decade". 

But wait, the data is yet to come. Axis Bank’s restructured advances amounted to 2.37%t of net customer assets as of December 31, 2014 according to data on the company’s website. Now you can calculate the amount and I am sure it will turn out to be few thousand crore. I feel I do not have to explain what, restructuring of loan means in real terms and how money is thrown under the table to get the unsecured loans passed. 

Also, restructured loans in India’s banking system represented 5.94% of total lending, data provided by the finance ministry in New Delhi shows. Now do one thing: Just find out whose loans the bank have restructured or in that group, how many individual accounts are there and how many accounts belong to corporates. 

Moreover, we know that the third largest private sector lender Axis Bank. has an exposure of Rs.50 crore to the Kingfisher Airlines Ltd that has not flown since October 2012. Did the bank get the loan back?

Now when the banks lose thousands of crore in the  name of restructuring then it seems to be normal. However, when it comes to the individual investors, private sector banks like Axis Bank Ltd looks to have all rules in place, so that maximum problem causes for the consumers and they can hold back the funds without paying any interest rates for years. 

For example, I am a nominee of the account of my mom, which has some balance (not much, only few lakhs) in my hometown in Assam. When my brother approached the bank branch there, the Axis Bank officials very reluctantly said that there has to be an in-person verification to get the money transferred to my account. I thought it is fine, as there is  nothing to hide. 

Meanwhile, I lost my PAN CARD and some other documents, so I asked my lawyer to prepare an affadavit so that I can prove my identity. 

Accordingly, I reached one of the Axis Bank branches in Mumbai (MMR). The bank officials there first said, that such claim has to be settled only by the local branch. But when I said, that it will take at least 4-5 days to reach my destination by train (I generally do not travel by air, as I have breathing problem) in Assam, they said insensitively: "You have to go there and settle the issue". 

When I further argued that the local branch has asked me to visit any branch and get the problem solved. The said officials said: "Ok, then show me ur original documents, so that we can send a scanned copy of the same for process to start". 

When I said, that I do not have the identification proof, as is prescribed by the bank and have the court affidavit, they said they cannot help; as "Affidavit is not a valid document" according to RBI rules, as it is only a "declaration". When I said, "Do, you want to say, that I bluffed (told lies) infront of the court". They said, they cannot consider only the documents mentioned by the RBI to be used as ID proof or wait for sometime, till new PAN card comes. I even asked if it is possible that a person identifies me in Mumbai.....but alas everything fell on their deaf ears. Such is the nature of their high-handedness, these banks show when you give your money to them.....Huh!! 

Then I again approached the local branch from Mumbai (I called a guy there), and requested him to see if it is possible that my brother would go to his AXIS Bank branch with my Voter ID card and I would present the duplicate here in Mumbai--they are at liberty to cross check, both the original and duplicate at both the ends and start the procedure. He said why I do not want to place the original in Mumbai. I said, "It will take some time to reach the ID card from Assam to here in Mumbai and also there is a chance of the card getting lost on the way". 

But then again nothing could melt the ice--the bank official surprisingly said, "No this is not possible, you need to be present in front of the Bank officials with ID PROOF". When I said, why are you harassing me, when the money is mine, he said "We have to go by the rules". 

Now my question is: if such is the attitude of any bank, when a person of my stature is concerned, then you can understand how they deal with innocent (and illiterate) bank account holders. 

I do not think, after this kind of incident, it can be said that AXIS BANK is the best performing bank in India. It is one those banks, who will hold your money for their own interest, by showing all sorts of rules. Remember, they have not been paying any interest on my matured Fixed Deposit, since 2012. Nor they have sent me repeated reminders that my money is lying with them. But I am sure they have used my money for lending.  

Also, I will now have to wait till my New PAN Card, Driving License, etc comes or my brother sends my Voter ID Card from Assam, to my home address here; with a caveat, that there is ample chance of getting that lost on the way. 

Anyway, I have asked my lawyer to find out if any legal action can be taken against the bank, apart from filing a law suit for adequate compensation (for the loss of time and energy).

Hence, I oppose any move by the government to have a bank account, compulsorily. It is my wish, whether I should have a bank account or not--why should the government force me for the same...? I feel someone should file a PIL in any higher court, against any such move to make bank account, a fundamental criterion to open a demat account.

Therefore, when you deal with private or public sector bank, be blunt to deal with them firmly; so that they understands that they are playing with  your money and cannot show too much "Dada-giri". Or in other words, they are doing business with our money and hence they need to be dealt accordingly. 

Most of these banks are "The Instruments of Torture" and therefore, the government should make rules so that the rules are framed in a way, so that there is minimum trouble for the account holderes. 

DO YOU KNOW

Deutsche Bank has raised its investment recommendation on software firm Rolta India Ltd bonds to BUY from hold. The stock started to fall from around Rs.177, after a research report alleged irregularities in its financials; even as the company termed it as "malicious" attempt to pull down its stock price.

Deutsche Bank raised its investment recommendation on the software firm Rolta India Ltd bonds to buy from hold a day after the company denied allegations made by short-seller Glaucus Research about fabricated capital expenditures. Deutsche said it agreed with the company's response that Glaucus had made factual errors in its report and the report had very little new information.

The risk taking investors can therefore buy the scrip of the company at Rs.134-135, for a short term target of Rs.142.

India’s steel demand seen growing as Modi seeks faster investment

Steel demand is expected to rise at the fastest pace in four years, benefiting top producers including Tata Steel, SAIL and JSW Steel

Photo: Commodity Online

Mumbai/New Delhi, April 16, 2915: India’s demand for steel, an economic growth indicator in Asia’s third-largest economy, is expected to rise at the fastest pace in four years, benefiting top producers including Tata Steel Ltd, Steel Authority of India Ltd (SAIL) and JSW Steel Ltd.

Demand may expand by about 5% this year to March, according to the average of eight estimates from industry executives, government officials and analysts surveyed by Bloomberg, from 3% in the previous year. Sales will be boosted by a possible revival in stalled projects and home and vehicle purchases after India’s central bank cut interest rates.

Higher demand for the alloy will help producers cope with a glut created by record imports, and the lowest prices in four years. India’s economic growth will surpass China’s for the first time since 1999 in the year to March, according to the International Monetary Fund (IMF).

“Lowering of interest rates will cut capital costs and push up investments,” T.V. Narendran, managing director at India’s biggest producer Tata Steel, said at a conference in Mumbai on Thursday. “It should also drive consumption of homes and cars.”

Reserve Bank of India (RBI) governor Raghuram Rajan lowered rates by 25 basis points each in two separate unscheduled cuts in January and March, prompting lenders to pass on benefits to consumers. The move is expected to boost demand for cars, homes and consumer durables. A wider-than-expected drop in the nation’s wholesale prices reported on Wednesday further boosted the odds of a third interest rate cut from the central bank this year.

Bank debts

About $392 billion of infrastructure projects, more than the size of Thailand’s economy, were stalled as of early March, government data show. That has left in its wake stressed bank debts that can jump to almost 13% of the total loan advances, the highest level since 2001, India Ratings forecasts.

“There are issues that need to be addressed for a sustainable rise in steel demand and tackling the debt issue at steel factories is one of them,” said Rita Singh, chairperson at Mideast Integrated Steel Ltd. “We should also look at what the country’s needs are going to be and not just go on building capacities.”

Prime Minister Narendra Modi is seeking the opposition’s support to enact a law that speeds up land acquisition, one of the biggest hurdles facing industrial projects.

Signs of an economic revival led Moody’s Investors Service last week to raise India’s credit outlook to positive from stable.

India is planning to triple its steel production capacity to 300 million tonnes in 10 years, steel minister Narendra Singh Tomar said.

“All the levers for a surge in steel demand are there and very soon consumption will take off, especially in building infrastructure like ports, roads and power plants,” said S.K. Dey, deputy general manager at state-owned engineering consultant Mecon Ltd. “This will help in the utilization of new steel making capacities coming up.” Bloomberg

Courtesy: Live Mint

Canada to Supply Uranium to India for 5 Years Under Landmark Deal

[Editor: After an absence of 40 years, Canada is once again selling uranium to India. The sanctions were a response to India’s unauthorized use of Canadian uranium to produce weapons-grade plutonium in the 1970s. The deal is a good one for Saskatoon-based Cameco Corp, which has won a lucrative five-year contract to supply more than seven million pounds of uranium concentrate to one of the few major countries intent on expanding its nuclear generating capacity. On May 18, 1974, India exploded an atomic bomb, leading Ottawa and Washington to impose the trade curbs and spawning the creation of the Nuclear Suppliers Group, which joined in the embargo and now numbers 48 countries.

The restrictions were eased in 2008, after New Delhi reached a deal with Washington to continue a moratorium on tests and to accept conditions set by the International Atomic Energy Agency to ensure imports would not be diverted to its weapons program. India PM, Narendra Modi, might take the single-handed credit without even mentioning the role of the previous UPA government. 

Now, tell me how much foreign exchange, will be lost due to this mindless deal? Moreover, since the material will be imported in huge quantities, this will create further pressure on the INR. Moreover, development of more and nuclear reactors for generation of power, will help a specific group of foreign companies. This deal will help the Canadians more than the Indians. India needs to develop, its renewable energy capabilities, instead of running after hazardous, nuclear power...]

OTTAWA, April 16, 2015:  Canada on Wednesday agreed to supply 3,000 metric tonnes of uranium to energy-hungry India from this year under a $254 million five-year deal to power Indian atomic reactors, four decades after bilateral cooperation in this sector was frozen over India's nuclear programme.

The agreement for uranium supply, which came two years after protracted negotiations following the 2013 civil nuclear deal between India and Canada, was signed after comprehensive talks Prime Minister Narendra Modi had with his Canadian counterpart Stephen Harper.

Cameco Corporation will supply 3,000 metric tonnes of uranium over five years to India at an estimated cost of $254 million and the supply will start from this year, a top official said.

Canada is the third country to supply uranium to India after Russia and Kazakhstan. The supplies will be under the International Atomic Energy Agency (IAEA) safeguards.

Canada banned exports of uranium and nuclear hardware to India in the 1970s after it was alleged that New Delhi used Canadian technology to develop a nuclear bomb.

The two countries put this behind them with the Canada- India Nuclear Cooperation Agreement that took effect in 2013.

At a joint press conference with PM Harper, Prime Minister Modi said, "The agreement on procurement of uranium from Canada for our civilian nuclear power plants launches a new era of bilateral cooperation and a new level of mutual trust and confidence."

"The supply of uranium is important as India is keen to have clean energy. The world is worried about global warming and climate change. We want to give something to humanity through clean energy. It is costly but we are doing this for humanity. For us, uranium is not just a mineral but an article of faith and an effort to save the world from climate change," he said in response to a question.

PM Harper said, "There have been unnecessary frosty relations for too long (between the two countries) and it is time to move ahead."

Mr Modi, the first Indian Prime Minister to visit Canada in 42 years, said, "The deal will enable India to power its growth using clean energy."

Canada is the second-largest producer of uranium globally, with exports valued at over $1 billion per year.

PM Modi said the resource-rich country has the potential to be a key partner in India's national development priority.

"This is a growing relationship. Trade potential between our countries is enormous. Prime Minister Harper and I are committed to establish a new framework for economic partnership," the Prime Minister said, adding, "Ours is a natural partnership of shared values."

"Our relationship had drifted in the past. In recent years, Prime Minister Harper's vision and leadership changed the course of our relations," PM Modi said.

Courtesy:  NDTV Ltd

Rasoya Proteins Ltd: Update

Rasoya Proteins Ltd is likely to have Low Levels of Operations in Solvent Extraction, due to inadequate supply of Soya Seeds till September, 2015, when the new crop will come up. 

Due to this adverse situation, the company has decided to minimize its operations of its solvent division and oil refinery division, to cut down on the operating costs. This will though reduce the turnover, but the company is expected to show some profit in the following quarters. 

Moreover, in absence of the full-scale operation in the main Solvent Extraction Plant and Oil Refinery Division, the company has started to focus more on the export market. Last year the export turnover, was around 30% of the sales and in FY15 too, the management hopes, to at  least maintain the same, if not increase it. 

However, the silver lining is that: inadequate supply of seeds has not affected the manufacturing activities of the Fish Feed Division and Power Lecithin Division--both will be EBIDTA accretive in the coming days. The company has already started to revamp its operations in its Aqua Feed Division. 

Moreover, the company has started to widen its marketing network from Andhra Pradesh to other states such as West Bengal and Orissa. 

In such a situation, the investors are suggested to buy this sure shot hot pick at the CMP of Re.0.55 (NSE) and Re.0.57 (BSE) and keep holding till September, 2015 for some superb gains. I am expecting a target of Rs.5 (which means more than 8 times the CMP of Re.0.55/0.57) by the end of September, 2015. 

DO YOU KNOW?

Coal is one of the essential fuels for any cement plant. Jaiprakash Associates Ltd (Rs.26.20) had been procuring the coal to meet its requirements through various sources including import and was also developing Mandla North Coal Block in the State of Madhya Pradesh as an additional source.

However, in an unfortunate event, the Hon’ble Supreme Court of India cancelled various coal blocks including the aforesaid Mandla North Coal Block and ordered auction of the same. 

But, in the recently held e-auctions, Mandla North  was won by Jaiprakash Associates Ltd, at Rs. 2,505. This will give an additional leverage to the Jaiprakash Associates Ltd. 

Moreover, with the CPI coming down, the chances of another round of Repo rate cut is on the cards; this gives positive vibes for the shares in the construction/real estate and power sector, apart from other like Automobile. My old recommendation in the real estate space, Anant Raj Ltd (Rs.46) is already up more than 5% in today's morning trade. 

India's retail inflation hits three-month low, scope for rate cut

Mon Apr 13, 2015: India's consumer price inflation unexpectedly slowed to a three-month low in March, which could encourage the Reserve Bank to deliver another off-cycle interest rate cut to boost economic recovery.

Retail prices rose 5.17 percent year-on-year last month, slower than a 5.5 percent annual rise predicted by analysts in a Reuters poll and a 5.37 percent gain in February.

Food prices were up 6.14 percent year-on-year in March compared with a revised 6.88 percent rise a month earlier.

With inflation below the 6.0 percent upper end of the central bank's target range, some analysts expect Reserve Bank of India (RBI) chief Raghuram Rajan to surprise investors with another rate cut.

The central bank has cut interest rates twice this year at unscheduled meetings, but kept its key repo rate on hold at 7.50 percent last week, waiting to assess inflation pressures and give commercial banks more time to cut lending rates.

"This has raised the possibility of an interest rate cut outside the scheduled review cycle for the third time this year," said Shilan Shah at Capital Economics, who expects a 25 basis point cut before a scheduled policy review on June 2.

Before the data, many economists were expecting the RBI to keep rates unchanged for now, but cut once more in late June.

During the last few weeks, unseasonably heavy rains in north and central India have damaged crops, leading to a rise in vegetable and foodgrain prices.

The RBI said last week that it expects consumer inflation to stay at current levels in the April-June quarter, helped by weak oil and food prices, but rise to 5.8 percent by the end of the year.

Globally, central banks are fighting to contain concerns over deflation, as prices continue to fall in most eurozone countries, Japan and China.

India, however, is one of the brighter spots, with the economy picking up after two years of sub-par growth, reflecting in part a recovery in business confidence since Prime Minister Narendra Modi swept to power with a landslide election victory last May. 

(Reporting by Rajesh Kumar Singh; Editing by Douglas Busvine and Tom Heneghan)

Courtesy: Reuters

Jaiprakash Associates Ltd: Buy in Bulk

CMP: Rs.26.10

You must have seen the recent media news that Jaypee Group is in talks with Heidelberg Cement, and Sajjan Jindal-led JSW Cement, to form a joint venture which will control the majority of its cement plants as part of an ongoing exercise to reduce debt. Jaypee is open to becoming a junior partner in the proposed venture with a 49% shareholding but may even go down to 40% thereby ceding management control and a majority stake, added the report.

As per the report, the rationale behind the exercise, is to significantly bring down Jaypee's consolidated group net debt in one shot.

Moreover, JSW Energy Ltd (JSW) Ltd and Jaiprakash Power Ventures Ltd (JPVL), announced the signing of binding memorandum of understanding (MoU), for the 100% acquisition by JSW of two (1,091 MW Karcham Wangtoo project and the 300 MW Baspa II project from) operational plants of JPVL. 

The sale of the two hydropower plants was part of the Jaypee group’s strategy to reduce debt by selling assets. In the last two years, the group has sold assets worth Rs.21,000 crore.

The Competition Commission of India (CCI) has already approved the sale of two of Jaiprakash Power Venture Ltd.’s hydropower assets to JSW Energy Ltd. JSW Energy had approached anti-trust regulator seeking clearance to complete the Rs.9,700 crore deal with Jaiprakash Power Ventures.

This is expected to have a rub-off effect on the shares of Jaiprakash Associates Ltd, especially when the NSE mid-cap index is near all-time high. 

Meanwhile, the government of India ha approved two electronic chip manufacturing plants in February 2014 at a total cost of Rs.63,410 crore. One plant will be set up by Jaiprakash Associates Ltd, with IBM and Tower Semiconductor of Israel as partners. According government sources, both the consortium are still working on their financial arrangements.

Besides, easing food prices pulled down retail inflation in March to a 3-month low of 5.17% despite unseasonal rains, renewing industry clamour for further cut in RBI policy rate to boost growth.

The World Bank has predicted a GDP growth rate of 8 per cent for India by 2017 and said that a strong expansion in the country, coupled with favourable oil prices, would accelerate the economic growth in South Asia.


In India, GDP growth is expected to accelerate to 7.5 per cent in fiscal year 2015/16. It could reach 8 per cent in FY 2017/18, on the back of significant acceleration of investment growth to 12 per cent during FY 2016-FY 2018, the bank said in its semi-annual report.

Now, with the interest rate on a downward trajectory, power tariffs remaining attractive in power-starved Northern and Southern India until FY17 and the coal costs being benign, the shares of Jaiprakash Associates Ltd (Rs.26.10) and Jaiprakash Power Ventures Ltd (Rs.10.82) are expected to move upwards, steadily. The investors are therefore, suggested to buy the stocks of the company at the CMP of Rs.26.10 and keep holding. 

MARKET MANTRA

Genera Agri starts farming operations in Tanzania

Nifty  has started moving up after making a low of 8269, almost a week back. It has bounced back 518 points after witnessing a huge downward move of 850 points in the month of March, 2015. Mid-cap and Small-cap indices have outperformed broad market during the current rally and are trading at new high. The traders are suggested to play Nifty_Futures according to the demand and supply zones. However, the short, medium and long terms trends are all up and hence this market is BUY-on-DIPS. 

Today's Call: Buy Jaiprakash Associates Ltd at Rs.26.25-26.30 for a short term target of Rs.31. Both Jaiprakash Associates Ltd and Jaiprakash Power Ventures Ltd (Rs.10.86) are expected to do well as the Jaypee Group has brought down the debts to some manageable levels. Both of them therefore, becomes a "Screaming Buy" at the CMPs. Jaiprakash Associates (JAL) would be a key beneficiary of a stable government being in place on the back of progress on asset monetisation and anticipated infrastructure and economic recovery.
Meanwhile, the Supreme Court has granted J P Associates Ltd a week to pay the last installment of Rs.250 mln out of a fine of Rs.1 bln that was slapped on the company for fraudulently obtaining environmental clearance for its cement unit.

Accumulate Rasoya Proteins Ltd at Re.0.58, for a short term target of Rs.2-3. Since both the mid and small cap indices are outperforming the broader market, these kinds of stocks are likely to give one of the best returns in the short term. 

With the gold prices showing buoyancy, the Gems and Jewelry stocks are expected to do well in the coming days. Gitanjali Gems Ltd has already given a break-out above Rs.46.30. The next logical target seems to be Rs.49, which might be achieved within a couple of days. Stay invested. Another share in the same space, Renaissance Jewelery Ltd today touched Rs.110 and is now trading at Rs.106.35 up 7.20%.

Meanwhile, Genera Agri Ltd hit the buyer freeze in the BSE at Rs.4.91. The scrip will be moving towards Rs.10-11 in the coming days. 
Karuturi Global Ltd today touched Rs.1.82 and is now trading at Rs.1.79 up 4.07%. I am bullish on this counter due to some recent positive developments. 

DO YOU KNOW?

As you must be aware that Karuturi Global Ltd, agreed with the Ministry of Agriculture (MoA), Ethiopian government to grow wheat on 300 thousand hectares of fertile land. 

However, Karuturi Global Ltd failed to repay a 65 million birr (a little over $3 million) loan extended via overdraft facility from the state-owned Commercial Bank of Ethiopia (CBE); though the company immediately settled the minimum, 25% of the debt. Karuturi is known for borrowing from CBE, Dashen and Zemen banks. The loan extended to the company exceeds 170 million birr (~$8 million). 

Recently there were media reports that the deposed Indian flower firm is planning a major comeback to Kenya, after entering a debt deal that would enable it retake its vast farms currently under control of its creditor CFC Stanbic Bank. 

Managing Director Ram Karuturi last month told an Indian investment analyst that his board had successfully restructured the company’s debt to pave way for the retake of the Kenyan business.

According to the CEO, the company has around $70 million worth of machinery in Ethiopia---the company is selling out the surplus of machineries, equipments and other accessories it had in the farms. Though the company did not officially mention, what it would do with the fund, but it is widely believed that a major part of the money would go, for the settlement of the outstanding debts. 

In this circumstance, it would be prudent for high-risk-taking-investors to buy the scrip of Karuturi Global Ltd in Bulk at Rs.1.70 and keep holding. 

Foreign fund inflows cross Rs.81,000 crore mark in 2015

Photo: Business Today

NEW DELHI, 12 Apr, 2015: With overseas investors pumping in over Rs.2,000 crore in the Indian capital markets so far this month, total foreign fund inflows have crossed the Rs.81,000 crore mark since the beginning of the year. 

Analysts expect the inflows to accelerate further going ahead, helped by clearance of reform bills for insurance, coal and mining, as also on assurances on controversial issues like General Anti Avoidance Rules (GAAR). 

Foreign Portfolio Investors (FPIs) have bought shares worth Rs.2,392 crore till April 10 this month, while they pulled out Rs.337 crore from the debt markets, taking their net investment to Rs.2,054 crore ($ 329 million), as per the data compiled by Central Depository Services Ltd. 

This has taken their total net investment in the country's capital markets (equity and debt segments) so far in 2015 to Rs.81,030 crore (about $ 13 billion). 

Market participants attributed the robust inflows to positive investor sentiment driven by several reform measures announcement by the government. 

Finance Minister Arun Jaitley announced a slew of measures to attract overseas investment in the country in the his Budget for 2015-16. 

Besides, he has deferred the controversial GAAR by two years to soothe investors' nerves, saying its immediate applicability can create "panic" in markets. 

The net inflows by overseas investors in debt markets stood at Rs.1.59 lakh crore in last year 2014, while the same for equities was Rs.97,054 crore. 

Overall, the net investment by foreign investors stood at Rs.2.56 lakh crore last year. 

Courtesy: The Economic Times

DO YOU KNOW?

There are media reports that Cameco Corp, Canada’s biggest uranium producer, would reap a revenue windfall once a sales agreement is finalized with India, while boosting employment in its home province.

.

A deal would be “huge,” yielding hundreds of millions in revenue and supporting jobs in the mining sector, Saskatchewan Premier Brad Wall said in an interview with Bloomberg News on Friday. He was asked to comment on a possible agreement by Saskatchewan-based Cameco to provide uranium for nuclear power.

“It’ll mean tax revenue, it’ll mean job retention, it’ll mean new jobs, if in fact there is an agreement here with India,” Wall said by telephone. “Depending on all the specifics, you’re going to be talking about hundreds of millions of dollars worth of sales over some period of time.”

Narendra Modi, went to Canada to give them benefit or India? It is true that India currently requires three times as much uranium as it produces to fuel its reactors; but then without getting a reciprocal benefit, why is he signing such a huge deal which will basically benefit the Canadians more than Indians? 

Day by day, Modi-nomics is turning out to be disastrous for Indian economy. While there is no money (or shortage of resources) for public welfare schemes in India, Narendra Modi is on a "Shopping Blitzkrieg" hopping from one country to another, funded by poor tax payers money. 

It is to be noted that India has recently signed a multi-billion-dollar deal to buy 36 fighter jets from France; while the country is running a high FD and CAD. These kinds of whimsical-economic-decisions  are putting pressure on some sectors like Gems and Jewelry. Also, there are no efforts to curb the dumping of steel, from China, Russia, Japan, etc. 

I am asking: Narendra Modi government is preparing for which "WAR", that it is going hammer and tongs, as far as the purchase of defense equipments are concerned? Normally when diplomacy fails, a war breaks out, Isn't it?

The truth is that, it is only due to industry and hard work of India Inc, that we are witness some improvement in the IIP numbers, otherwise, there is little help from the NDA government to shore up the Indian economy; with an amateur Finance Minister at the helm.  

Those who rooted for Narendra Modi as the Prime Minister of India, might be the most disappointed ones. 

GMR Infrastructure Ltd: Hold

CMP: Rs.18.8

There are recent media reports that the two financial institutions have released 13.5 crore shares in diversified GMR Infrastructure Ltd, that were pledged by the company's promoter GMR Holdings.

Around 7.45 crore shares were released by JM Financial Products on April 9 and 6 crore shares were released by SICOM Ltd on April 10, GMR Infrastructure said in a regulatory filing.

The 13.5 crore shares that were released translated into a 3.08% stake.

The value of 7.45 crore shares, based on April 10 closing price of Rs.18.80 a piece, is estimated at Rs 140.06 crore. While 6 crore shares are worth Rs 103.8 crore based on April 9 closing price of Rs 17.30.

Recently, a consortium led by GMR Infrastructure Limited was issued Letters of Award for construction of 417 Km long Eastern Dedicated Freight Corridor railway project at a cost of Rs.5,080 crore on EPC (engineering, procurement and construction) basis. The project is to be executed in two phases—first involving a 180 km stretch between Mughalsarai and Karchana (near Allahabad) and second involving a 237 km stretch between Karchana and Bhaupur (near Kanpur).

Meanwhile, GMR Infrastructure Ltd's rights issue which closed last week, was a tad oversubscribed. The company was expected to raise close to Rs.1,402 crore but have got Rs.1450 crore.

Jaiprakash Power Ventures Ltd: Buy in Bulk

CMP: Rs.10.65

You must be aware that Jaiprakash Power Ventures Ltd is selling some of its plants to bring its debt to some manageable levels. JSW Energy Ltd will acquire (100 per cent stake) two hydro-electric projects of Jaiprakash Power Ventures in Himachal Pradesh for about Rs.9,700 crore.

Earlier, Sanjay Sagar, joint managing director & chief executive officer,  JSW Energy Ltd said that the company’s deal with  JP Power will be completed by March 31 or early April  (2015)--this was their timetable. This means we are just near the final lap of this crucial deal. Meanwhile, the Competition Commission of India (CCI) approved the sale of two of Jaiprakash Power Venture Ltd’s hydropower assets to JSW Energy Ltd in February, 2015. JSW Energy Ltd had approached anti-trust regulator seeking clearance to complete the Rs.9,700 crore deal with Jaiprakash Power Ventures Ltd (JPVL). Debt for Jaiprakash Power Ventures stood at Rs.17,888 crore at the end of the September quarter.

The stock continues to be a buy on dips, as there are large upsides from interest rates in longer time frame. 

JPVL acquired Bina Power Supply Company Limited (BPSCL) from Aditya Birla Group. BPSCL was set up by the Aditya Birla Group to set up a coal fired Thermal Power Plant at Bina in the state of Madhya Pradesh.

Commissioning:

• Unit 1 commissioned in August, 2012
• Unit 2 commissioned in April, 2013

Besides, Jaypee Nigrie Super Thermal Power Project comprising 2 x 660 MW Super-critical Unit is likely to be the only plant to make reasonable ROE for JPVL. 

The investors should therefore, do well to buy the scrip of the company at the CMP of Rs.10.65 (Book Value: Rs.21.54 and Market Cap: Rs.3,137.79 Cr) and wait for its to close above Rs.15.50, for some scintillating returns going forward. 

Gold Regains R. 27,000 on Global Cues, Buying by Jewellers

[Editor: The gold as expected has started to move up. My recommended Gitanjali Gems Ltd (Rs.46.60) and Renaissance Jewelry Ltd (Rs.99.25) has already reached my first targets. Gitanjali Gems Ltd, this time is expected to cross Rs.100 and hence do not sell in a hurry. Moreover, Renaissance Jewelry Ltd touched Rs.104.80, intra-day on last Friday. 
Meanwhile, there are media reports that Indian Prime Minister, Narendra Modi wants to get his hands on the temple gold, estimated to be about 3,000 tonnes, more than two thirds of the gold held in the US bullion depository at Fort Knox, Kentucky, to help tackle India's chronic trade imbalance.Modi's government is planning to launch a scheme in May that would encourage temples to deposit their gold with banks in return for interest payments] 

11 Apr, 2015: Gold regains Rs 27,000 on global cues, buying by jewellers NEW DELHI: Gold prices rose for the second straight day and reclaimed the psychologically important Rs 27,000-mark, surging by Rs 280 to trade at Rs 27,080 per 10 grams at the bullion market today amid a firming global trend.

Besides, increased buying by jewellers to meet wedding season demand helped the precious metal to recapture the crucial level.

Silver also advanced by Rs 150 at Rs 36,900 per kg on increased offtake by industrial units and coin makers.

Bullion traders said besides a firming trend overseas, increased buying by jewellers mainly led to the rise in gold prices.

Gold in New York, which normally sets price trend on the domestic front, shot up by 1.16 per cent to USD 1,207.30 an ounce and silver by 2.07 per cent to USD 16.49 an ounce in yesterday's trade. 

In the national capital, gold of 99.9 and 99.5 per cent purity rose by Rs 280 each to Rs 27,080 and Rs 26,930 per 10 grams, respectively. It had gained Rs 50 yesterday.

However, Sovereign remained flat at Rs 23,700 per piece of eight grams in scattered deals.

In a similar fashion, silver ready rose further by Rs 150 at Rs 36,900 per kg and weekly-based delivery by Rs 310 at Rs 36,710 per kg. 

On the other hand, silver coins, however, traded at last level of Rs 55,000 for buying and Rs 56,000 for selling of 100 pieces. 

Courtesy: The Economic Times

WINNING STROKES: THINK DIFFERENT

Nifty reached my short term target of 8600 few days back. Now with today's close above 8700, we can look for higher targets as the trend for the short, medium and long term are only up. The Premium Members might have taken long positions on Nifty during the day. 

Today a buy call was initiated on Bhusan Steel Ltd at Rs.63.50--63.80, for a target of Rs.82. The stock touched Rs.73.85 intra-day before closing at Rs.70.60. What is the buzz in the counter? Join the Paid Group to get such scintillating calls. 

Yesterday's call Gitanjali Gems Ltd today flared up and reached Rs.46.25 in the BSE intra-day, before closing at Rs.45.25, up 3.76%. My another recommendation in the same space Renaissance Jewelry Ltd today moved to Rs.97.50 before cloisng at Rs.91.65, up 10.69%. And my favourite in this space P C Jeweler Ltd also shone well in the bourses today as the scrip closed at Rs.349, up 4.24%. With the inflation tiger lurking behind, the gold jewelry stocks are expected to do well in the coming days. One buy these scrips on all declines. 

My recommended Rasoya Proteins Ltd today hit another buyer freeze in the BSE. At BSE it closed at Re.0.67 up 4.69% and in NSE it closed at Re.0.70. The short term target for the scrip remains at Rs.1.20. 
My recommended Jindal Saw Ltd today moved to Rs.72.75, intra-day before closing at Rs.70.25. The Saw pipe making companies are expected to do well in the coming days.
My repeatedly recommended Jaiprakash Power Ventures Ltd today moved to R.10.44 intra-day before closing at Rs.10.34. The company would be one of the biggest beneficiaries of the coal auction. Jaiprakash Power Ventures recently bagged the Amelia (North) mine in Madhya Pradesh quoting Rs.712 per tonne, the highest among 11 firms including Adani Power, BALCO and Essar Power.
PSL Ltd hit another buyer freeze today at Rs.11.69. The name of the scrip was mentioned in this blog, few days back. 
My recommended Jindal Saw Ltd today moved to Rs.72.75, intra-day before closing atg Rs.70.25. The saw pipe making companies are likely to do well in the coming days. The next target for the scrip is Rs.82.
GMR Infrastructure Ltd today moved to Rs.18, before closing at Rs.17.40. There were recent media reports that GMR Infrastructure-led consortium bagged Rs.5,080 crore railway project. I had already given a target of Rs.22, for the scrip. Today, Ashish Maheshwari also came out with a similar target.